Private sector lender Dhanlaxmi Bank is aiming big to focus on the gold loan business. With stringent regulations coming up for NBFCs dealing in the gold loan business, banks now see huge potential in the field.

Thinking on these lines, Dhanlaxmi Bank has aimed to grow its gold loan segment from forming 8% of its total loan book to 20-25% in this fiscal, said Mr P G Jayakumar, CEO of the bank.

He added this category of loan being a secured one is also safe as a product for banks.

He also said that probably Reserve Bank of India has better comfort with allowing banks in taking forward the gold loan business because banks follow stringent Know your customer (KYC) processes.